Canara Bank probes fraud in unit after whistleblower complaint-source

Can Fin Homes

09/05/2022 14:41

By Nupur Anand
    MUMBAI, May 9 (Reuters) - Indian state-owned lender Canara
Bank  CNBK.NS  is investigating fraud in its housing finance
unit Can Fin Homes  CNFH.NS , after a whistleblower complaint
highlighted irregularities in certain accounts, said a direct
source.
    The whistleblower letter, sent at the end of December and
also addressed to Reserve Bank of India and the National Housing
Bank, said there were irregularities at one of the branches.
    "We decided to act on this complaint given the severity of
the situation and found out that there were frauds in 37
accounts worth 39 million rupees ($504,149.54). We have made
provisions of an equal amount," said the source, who declined to
be named as the discussions were private.
    Fake income tax return documents had been submitted for
those accounts, the source said. An internal committee was still
probing the matter to find out more about the nature of the
fraud.
    Canara Band and Can Fin Homes did not immediately respond to
requests seeking comment.
    Stocks of Canara Bank and Can Fin Home fell 8% and 7%
respectively after media reports suggesting the central bank may
also investigate the fraud. However, in a regulatory filing,
Canara Bank said it had not received any intimation from the
regulator about such an investigation.
    RBI did not immediately respond to a request seeking
comment.
    Earlier this month, Canara Bank posted a net profit of 16.66
billion rupees for the quarter through March, compared to 10.11
billion rupees a year ago.
    ($1 = 77.3580 Indian rupees)

 (Reporting by Nupur Anand; 
Editing by Bernadette Baum)
 ((Nupur.Anand@thomsonreuters.com; +9122 68414388;))